CoreWeave to Acquire Bitcoin Miner Core Scientific for $9 Billion

AI hyperscaler CoreWeave has finalized an agreement to acquire the American mining company Core Scientific, which is valued at $9 billion.

As part of the deal, CoreWeave will exchange Class A shares for shares in the bitcoin miner at a ratio of 0.1235:1.

The terms include a 66% premium for Core Scientific shareholders based on the closing price of $12.30 on June 25. It is expected that they will hold less than a 10% stake in the combined entity.

The acquisition is slated for completion in the fourth quarter, pending approval from shareholders and regulators.

Following the acquisition, CoreWeave will possess data centers with a capacity of 1.3 GW, with the potential to expand by more than 1 GW.

In June 2024, the companies signed a 12-year contract, committing Core Scientific to provide the AI hyperscaler with infrastructure for 200 MW for hosting Nvidia graphics processors. This agreement was projected to generate $3.5 billion in revenue for the miner over its duration.

The acquisition will nullify this contract, and CoreWeave estimates that savings from not incurring rental payments could reach around $10 billion.

In September 2024, Core Scientific’s CEO Adam Sullivan announced ambitions to increase service volumes for the AI segment, given its greater profitability compared to cryptocurrency mining. However, he acknowledged that approximately 500 MW of the company’s capacity cannot be repurposed for high-performance computing due to technical limitations and will remain dedicated to mining.

According to Core Scientific, the firm mines around 5-7 BTC daily with a deployed hash rate of 19.7 EH/s. Since January 2021, the total cryptocurrency production has amounted to 40,132 BTC.

Core Scientific currently holds a balance of 993 BTC, according to BitcoinTreasures statistics.

In December 2022, the company filed for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code. It successfully completed its reorganization process in January 2024, and its shares were relisted on Nasdaq.

Following the announcement of the agreement with CoreWeave, Core Scientific’s stock plummeted over 18% at the start of trading, dropping to $14.70. The acquisition terms set the stock price at $20.40.

CoreWeave has suggested that, in the medium term, the combined company may cease its mining operations. Notably, CoreWeave had previously engaged in cryptocurrency mining before transitioning to the AI sector.

Additionally, it’s worth noting that in March, CoreWeave entered into a partnership agreement with OpenAI worth up to $11.9 billion.